RBI approves SBI Funds to acquire 9.99 percent stake in HDFC Bank.
In a recent update regarding HDFC Bank, the Reserve Bank of India (RBI), the banking sector regulator, has granted approval to SBI Funds Management for acquiring 9.99 percent of HDFC Bank's total paid-up share capital or voting rights. HDFC Bank promptly notified this development to the stock exchanges through a regulatory filing.
SBI Funds Management had submitted an application seeking approval from the RBI, which has now been granted with certain conditions. The RBI has stipulated that SBI Funds Management must complete the purchase of this stake in HDFC Bank by November 15, 2023. Additionally, the RBI has instructed that the stake held by SBI Funds Management in HDFC Bank should not exceed 10 percent.
Interestingly, HDFC Bank and HDFC are currently in the process of merging. During the announcement of the January-March quarterly results, Srinivasan Vaidyanathan, the Chief Financial Officer of HDFC Bank, stated that the merger would be finalized by July 2023. Notably, approval for the merger has been obtained from various regulators including the Securities and Exchange Board of India (SEBI), Pension Fund Regulatory and Development Authority (PFRDA), Competition Commission of India, and both the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).
It is worth mentioning that following the merger, HDFC Bank will emerge as the largest private bank in the country, with assets totaling Rs 20 lakh crore. The decision to merge HDFC Bank and HDFC was made in April 2022, and since then, the merger process has been ongoing consistently, with approvals being sought from all regulatory bodies. The merger process is anticipated to conclude in the April-June quarter. On Wednesday, HDFC Bank's stock closed at Rs 1638, reflecting a decrease of 0.38 percent.
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